China Trade Shows Part 2: What to ask the suppliers you meet

By Peter Zapf
VP Community Development, Global Sources

Part 1 discussed easy it is
to visit Hong Kong which is where Global Sources holds its China Sourcing
Fairs. Part 2 covers what you can expect to see when attending one of these
shows, along with points you may consider discussing with the suppliers.

China Trade Shows

If you need to source products from China and want to meet suppliers
face-to-face, the best way to do this is at China trade shows. Global
Sources hosts China Sourcing Fairs every April and October, with four shows
coming up this October. Three China Souring Fair shows will be held October
12-15, 2007 including:

Each set of show dates will have several thousand booths of suppliers
exhibiting their products. You'll be able to walk the show floor, stopping
at every booth that has products you're interested in. You can touch, feel
and look at the products, and also ask the suppliers all the questions you
have in order to qualify whether they are right for you.

Preparing for the show: know your requirements

If you're looking to source a specific product (rather than browsing for
ideas) prepare by writing all your requirements before going to the show,
especially your product requirements. Use this as a source of questions
you'll ask the suppliers you speak with. Getting these documented also
provides you a source of information to include as an attachment to the
purchase order or contract you ultimately place with the supplier.

Questions to consider asking the suppliers

You see an interesting product, now what? Being face-to-face with the
supplier, you've now got an excellent opportunity to find out if this is the
supplier that will meet your requirements. Whether at a China trade show, or
another trade shows, areas you'll want to discuss with the supplier include:

Price: What is the price, FOB Hong Kong (this means the supplier pays to
get the goods to the Hong Kong port). Often the supplier will tell you the
price per unit if you order 1 container worth of the product. This may be
more than you need.

Quantity: What is your minimum order quantity or can I start with a
smaller trial order? A smaller order quantity will result in a higher price
per unit.

Payment terms: Pretty common is 30% at time of placing the order and 70%
when the product ships from the supplier, but this can be negotiable.

Lead time: How long does it take from when I place the purchase order
until you have the goods delivered to the Hong Kong port? There are
sometimes delays, so don't bet your business on an on-time delivery.

Customization: Can you customize to my needs? Are OEM services
available?

Packaging Requirements: How do you want your products packaged? Do you
wants special artwork on either the inner or outer cartons? Is an
instruction manual required?

References: Do you have customers in the U.S. and how long have you been
exporting to them? Can you tell me who they are? It is helpful if the
supplier has experience exporting to your market; although it's ultimately
the importer's responsibility, the supplier will be more familiar with any
issues that may exist for a particular product.

Certification/Regulatory Approvals: Do you have the necessary
certifications or regulatory approval for this product in my country? Is it
current? Again, as the importer, it is your responsibility (not the
suppliers') to make sure all legal requirements are met. Do your homework on
this one.

Quality Assurance / Quality Control: How do you ensure Quality? What steps
do you take to ensure the quality of the product? What experience do you
have with third party quality assurance? Can I provide specific product
inspection criteria? In addition to talking about inspections at the end of
the process, you may listen to see if the supplier also talks about
continuous improvement of manufacturing processes in order to reduce future
quality problems.

Production updates / Quality Monitoring: Can you, the importer, get
regular updates on the status of production, including photos of raw
materials, components or parts, etc. If you want such updates, include them
as terms and conditions in your purchase order and go over the terms and
conditions one by one with the supplier.

Factory or Trading company: You want to know which the supplier is; each
has advantages, but if you want a product or packaging changed or the
quality control process changed, a trading company may have less ability to
control these changes. If you want smaller quantities or someone to
interface with the manufacturer on your behalf, a trading company can be
very helpful. In general, the wider the range of products displayed at the
show, the more likely the company is a trading company.

Visiting the factory: If you find one or two suppliers that you are really
interested in, you may ask to visit their factory. This will likely entail a
trip into mainland China, where English is not widely spoken, so plan this
well. Among other things, U.S. citizens do need a Visa to enter China
(although not Hong Kong).

Export License: Mainland Chinese companies can only export if they have an
export license. Sometimes the factory doesn't, and they go through an
import/export company in order to export. This can somewhat complicate the
transaction by adding another party; ask the supplier how he'll handle this.

Placing your order

You can, in fact, place an order while at the show. Many global buyers come
to China trade shows and meet with the suppliers they've been doing business
with for many years, placing their entire season's orders at the booth on
the show floor. Someone new to sourcing from China probably doesn't want to
take this big a step; instead he'll likely start by requesting several
suppliers send samples after the show (often paying for the samples and
their shipping). If the samples meet your requirements, you can start with a
small trial order. The trial order mitigates the risk of a big order not
meeting your needs. You may also consider hiring a third party inspection
company to inspect product after it has been manufactured but before it
ships.

Do also take advantage of the buyers that are at the show - talk to the
buyers in the booth of the supplier you're visiting and see which ones have
done business with that supplier and get their feedback. Talk to other
buyers at the show to learn more about importing from China. This networking
itself is a free educational opportunity and can be invaluable.

Valuable information on how to source products – via conferences

In addition to meeting with the suppliers, the China Sourcing Fair shows a
free conference program – Buying From China: What New Buyers Need to Know.
See the China Sourcing Fairs web site for details on times and dates.
Getting started is half the battle and these conference sessions may help
you get moving in the right direction.

Year round sourcing

If you're not able to go to Hong Kong for the China Sourcing Fair in October
or April, you can also use the Global Sources website (www.globalsources.com)
year-round to find suppliers, many of whom are also at the shows. The Global
Sources online directory lists a wide range of products from
china
manufacturers and suppliers, including
ATVs,
digital photo frames and
hand
bags - all from companies Global Sources has physically visited three or
more times to verify they are real companies. Alternatively, if dealing with
suppliers and the import process seems daunting, you go online and purchase
small lots of product direct from China on the
Global Sources Direct web
site.

Getting started

Although it's not difficult
to get started importing, importing is a serious matter. As the importer,
you are responsible for ensuring that products you import into your country
meet your countries regulations, in addition to your own product
requirements. If you need more information about importing into the U.S. you
can prepare by checking out the
U.S.
Customs website or check on the
World Customs Organization site under customs web sites for information from
other country's customs departments.

Whether through trade shows, online web sites, or magazines, there are
plenty of resources that can help you get started with the import process.
You start the process of expanding your China supplier base by registering
to attend the next
China Sourcing Fairs.

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